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In his on stage interview with Michael Arrington (at the Crunchies), Mark Zuckerberg made the most insightful observation of the evening. On being asked about privacy, Mark said that Facebook default settings from private to public since that is what it would have been like if it started today. Things were very different when they started 6 years ago in his dorm at Harvard. People were questioning the basic concept – why should I share my info on the web. Things have changed a lot since then. People share a lot of their life online on different places on the web.

If Facebook started today, they would take where the web is today into account. The default would be public rather than private. And this is why they changed defaults from private to public since they want service to remain relevant. Mark added that it was not an easy move – from a technical or a user perspective – to change a service with 300 million users on such a core dimension.

I have been very critical of Facebook’s change from private to public, but as a owner of a web service, I completely understand where Mark is coming from. How many of us are stuck at the point where we started – not been able to imagine what our service would be like if we started today. Our services are vintage the year which they started. Flickr is vintage 2004 when it started. Basecamp is vintage 2004. Delicious is vintage 2005. While they remain great services, there has been no re-imagining of the service so that it fits into the web of 2009-2010.

The problem with being the vintage of your launch year is that the domain gets reimagined. You get left behind even if you are doing everything right. This is the classic problem that so many companies face – they are innovative when they launch. They continue on the path they launch with, which they get traction with initially. At a certain point, they are executing so well, that they get left behind. Their success contains the seeds of their becoming obselete.

Facebook is avoiding that problem by constantly imagining what it would be like if it launched today. It might face criticisms and even loose some users with such moves, but it fits better into the web today. And ultimately this is why Facebook will survive and prosper.

Ask yourself – what would my service be like if it launched today? Is it substantially different than what you are now? It might be time to reimagine it.

The question came up post-crunchies where Facebook won the best startup and Twitter was runner up. The post crunchies conversation in the group I was in quickly turned to what is a startup and when does a company stop being a startup. Clearly Google is not a startup anymore. People also generally agreed Facebook is not a startup. About Twitter, there was mostly consensus that it is a startup at least for a little while more.

The question is what makes a company a startup
1. Is it the number of employees (Zynga has 750!, Twitter has less than 200 – from what I know)
2. Is it the valuation (post billion dollars – you are not a startup?)
3. The company does not have “professional management”. Has a more startupy feel?
4. When company is still figuring out its business model